Money Markets May See ‘Temporary Pressure’ Next Month

Federal Reserve Bank of Dallas President Lorie Logan said money markets could face temporary pressures around the end of next month, though the US central bank still has room to continue reducing its balance sheet. “We could see some temporary pressure around the tax date and quarter-end in September,” Logan said Monday.

Since 2022, Fed officials have been winding down the central bank’s balance sheet with the goal of bringing reserves to a minimum ample level that would avoid market disruptions, reversing trillions of dollars of asset purchases designed to stimulate the economy after the pandemic shock.